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Wednesday, May 30, 2012

Alexis Tsipras does it again!

Alexis Tsipras lives up to his role of being a trendsetter: this coming Friday, he and SYRIZA will announce their Economic Manifesto, i. e. what economic policies they would follow if elected. For that innovation in the ongoing electoral campaign, Mr. Tsipras and SYRIZA are to be congratulated!

The other good news is that with Friday as the announcement date, Mr. Tsipras has another 2 days left to make changes to his plans. Capital.gr published a preview of the Economic Manifesto which will be made on Friday. Should no changes be made to this, then Greeks will have the unique opportunity to vote Greece into disaster (or not, if they don't vote for SYRIZA).

One great emphasis of the Manifesto is for the state to regain control over strategic economic sectors. To hold on to state ownership of those companies which were intended to be privatized is called a non-negotiable goal.

Another target for nationalizaton are the banks because "this is absolutely necessary and indispensible to a government of the Left because these public banks will serve as a tool for developing, manufacturing and a social financing policy to meet social needs".

One doesn't need to read further on in the Economic Manifesto. The above already describes very clearly the vision which Mr. Tsipras has for Greece, namely, a country/economy where the state plays the predominant role.

If the "state" where the class of philosophers of Plato's Republic, I might feel differently but in today's world the state means parties and politicians. There is absolutely no way to keep the interest of parties and politicians out of banks and companies when the state has control over them.

To be sure: nationalization of banks can be an adequate measure when it is only for a limited time. When banks have to be recapitalized by the state, it is only logical that existing shareholders would see their equity wiped out. Equity capital is risk capital. But the state should own banks only for the time it takes for finding a new buyer. Hopefully, the state will recuperate its investment on the sale and perhaps even make a profit.

Greece has absolute no track record of being able to run a public sector efficiently. Why this would change under Mr. Tsipras is not being explained. Therefore, any vision which rests on the premise of more state control of the economy rather than less must be destined for disaster.

Incidentally, I haven't read anything about reforms in the preview but, then, there are still 2 days left for Mr. Tsipras and SYRIZA to ponder whether anything should be reformed in Greece.